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2013 DIGILAW 143 (PAT)

Laxmi Rai v. State of Bihar

2013-01-31

RAVI RANJAN

body2013
ORDER I have heard learned counsel for the petitioner and the State. 2. Petitioner seeks quashing of the order dated 05.04.2007 passed by the Licensing Authority-cum-Sub-Divisional Officer, Samastipur as contained in Annexure-8, by which his licence no.126/88 granted under the Bihar Trade Articles (Licenses Unification) Order, 1984 (hereinafter referred to as “Unification Order”) and the agreement for running the PDS shop have been cancelled as well as the appellate order dated 10.03.2008 passed by the Collector, Samstipur (Anenxure-6) and the revisional order dated 18.08.2009 passed by the Commissioner Darbangha Division in Miscellaneous Case No.1/2008-09 (Annexure-7) by which the aforesaid authorities have affirmed the order passed by the licensing authority and have dismissed the appeal and the revision. 3. Learned counsel for the petitioner has submitted that once a show cause notice was issued upon him disclosing the charges as well as the contemplated punishment of suspension under clause 11(1) of the Unification Order and, thereafter, vide Annexure-4 punishment of such suspension having been imposed on 04.10.2006, there was no occasion for the licensing authority to again issue a second show cause notice on the self-same charges as contained in Annexure-4 for contemplated cancellation of his licence. Second point raised on behalf of the petitioner that the entire exercise appears to have been done upon the direction of the Collector, Samastipur which would be apparent from the Annexures-1 and 3 as well as the final order of the cancellation of the licence as contained in Annexure-8 as it appears that the licensing authority has failed to apply its own mind and has acted upon the dictate of the Collector who happens to be the appellate authority under the scheme of the Unification Order. Another point raised on behalf of the petitioner is that though it has been stated in the order impugned that he had refused to accept the third show cause notice but in view of the fact that admittedly he had submitted his replies to the earlier show cause notices, at least that should have been considered and dealt with by the licensing authority at the time of passing of the impugned order and reasons should have been recorded for rejecting the ground raised. Another point has been raised that, even if it is assumed that the petitioner refused to accept the third show cause notice and obviously did not submit a reply thereof that in itself was not sufficient for cancelling the licence inasmuch as if the authority is going to pass an order visiting any civil consequence upon a person then it must disclose reason for doing that disclosing the evidence upon which it has reached to the conclusion that the irregularities are apparent on the part of the licensee requiring cancellation of his licence. It is urged that on perusal of the Annexure-8 it does not appear that any opinion has been made based upon the evidence which requires cancellation of the licence. Only thing which appears from the order is that upon certain direction of the District Magistrate some inquiry was held and some report was against the petitioner upon which the show cause notices were issued and on the basis of the inquiry report it appears that the petitioner had indulged in malpractice. Nowhere it has been dealt as to what were the evidences showing that the petitioner was involved in the concerned malpractice or irregularities. 4. Counter affidavit and supplementary counter affidavit have been filed on behalf of the State supporting the stand taken by the licensing, appellate as well as the revisional authority. 5. On consideration of the rival contention, this Court finds substance in the submissions raised on behalf of the petitioner. It is admitted position that cause of action has arisen at that point of time when the Unification Order was in operation. Though the order of cancellation has been passed after coming of the new Bihar Control Order of 2001 but the initiation of proceeding, inquiry, suspension etc. have been done prior to coming of the new Control Order, therefore, it has to be assumed that the proceeding was under the earlier Unification Order. The first issue as raised by the petitioner is that once the punishment of suspension was given to the petitioner then imposing another punishment for the self-same charge by cancelling the licence would be bad in law. Learned counsel appearing for the State has submitted that this limb of argument would not be available in the present case. It is urged that the law laid down by this Court in Pradhuman Chaudhary & Ors. Vs. Learned counsel appearing for the State has submitted that this limb of argument would not be available in the present case. It is urged that the law laid down by this Court in Pradhuman Chaudhary & Ors. Vs. the State of Bihar & Ors. and other analogous matters { 2010(4) PLJR 178 } would not be applicable in the present case inasmuch as while deciding the aforesaid issue this Court has considered the sweep and extent of the Public Distribution System (Control) Order of 2001. It has been clearly observed that there has been departure from the earlier Unification Order inasmuch as the suspension of licence during a proceeding for its proposed cancellation has obviously been omitted in the new Control Order. Prima facie, this limb of argument raised on behalf of the State appears to be very attractive but on deeper scrutiny it appears that under the earlier Unification Order also there was such provision. For better appreciation, the relevant provisions from the Unification Order are being quoted as under:– “11. Suspension and cancellation of licence.–(1) If any licensee or his agent or servant or any other person acting on his behalf contravenes any of the terms and conditions of the licence then without prejudice to any other action that may be taken against him under the Essential Commodities Act, 1955 (Central Act 10 of 1955) his licence may be cancelled or suspended with regard to one or more trade articles by an order in writing of the Licensing Authority and an entry will be made in his licence relating to such suspension or cancellation. (2) No order of cancellation shall be made under this clause unless the licensee has been given a reasonable opportunity stating his case against the proposed cancellation but during pendency or in contemplation proceeding of cancellation of licence, the licence can be suspended for a period not exceeding 90 days without giving any opportunity to the licensee of stating his case. Such suspension shall be limited only to those trade articles regarding which contravention has been made by the licensee.” 6. From perusal of the Clause 11(1) of the aforesaid Unification Order it would be apparent that two modes of punishment have been provided if a licensee contravenes any of the terms and conditions of the licence. First would be suspension and second would be of cancellation. From perusal of the Clause 11(1) of the aforesaid Unification Order it would be apparent that two modes of punishment have been provided if a licensee contravenes any of the terms and conditions of the licence. First would be suspension and second would be of cancellation. However, Clause 11(2) provides that if a proceeding has been initiated for contemplated punishment of cancellation of the licence then during the pendency of such proceeding also licence can be suspended for a period not exceeding 90 days. Thus, the situation emerges that under the Unification Order also the licence could either have been suspended by way of punishment or it could be suspended during the pendency of a proceeding for proposed cancellation of the licence. It has nowhere been stated as to under which provision or the Unification Order the licence of the petitioner was suspended vide Annexure-4. Before coming to any conclusion it would be beneficial to peruse the show cause notice dated 29.08.2006 issued to the petitioner as contained in Anenxure-1. From the perusal of the notice, it appears that four charges have been disclosed against the petitioner and the petitioner was directed to show cause as to why his licence should not be suspended. Thus, from the notice it is quite apparent that the same was issued in contemplation of imposition of a punishment of suspension only and not for cancellation. Subsequently, vide order dated 4.10.2006 as contained in Annexure-4 the petitioner’s licence was suspended but upon same documents and charges another show cause notice was issued for proposed cancellation of his licence. The question emerges as to whether there was initiation of any proceeding on separate cause of action, i.e., other than those described in Annexure-1? The entire record does not show that any proceeding other than the charges which have been mentioned in Anenxure-1 was being initiated. Thus, the answer would be one and simple that a proceeding for suspension was initiated and punishment of suspension was inflicted. That having been done, in the considered opinion of this Court, the subsequent notice for cancellation of the licence on the basis of same charges was not in accordance with law. Thus, the entire subsequent proceeding form the stage issuance of notice for cancellation till the pronouncement of the order of cancellation would not be sustainable in law. That having been done, in the considered opinion of this Court, the subsequent notice for cancellation of the licence on the basis of same charges was not in accordance with law. Thus, the entire subsequent proceeding form the stage issuance of notice for cancellation till the pronouncement of the order of cancellation would not be sustainable in law. So far second issue is concerned, it has been submitted on behalf of the petitioner that on perusal of Annexure-3 it appears that the District Magistrate has given a direction for lodging a first information report and, thereafter, for suspending the licence of the petitioner. It is settled principle that the authority which has been assigned to do some duty specially for taking a decision in a particular manner, it would be expected and required from it to take such decision on application of own mind and not on direction of his superiors. The situation would worsen if such superior authority is the appellate authority under the scheme of the statute. Thus, on that account also, specially in view of the fact that even from the impugned order it emerges that the action was being taken on the direction of the District-Magistrate-cum-Collector, Samastipur contained in his order dated 12.08.2006, the order of licensing authority would be bad. Another point raised by the petitioner is also of some substance as, though it has been stated in the order that the petitioner has refused to accept the third show cause notice, but admittedly the grounds raised cause shown by him with respect to the earlier show cause notices have also not been dealt with by the licensing authority and on this account also it appears that the order has been passed in a mechanical manner without application of mind. A reference is made to a decision of a Division Bench of this Court rendered in M/s. Umesh Chandra Dinesh Kumar Vs. State of Bihar and other {1999(1) BLJ, 458}. That apart, it has not been disclosed in the order anywhere as to what was the basis or evidence against the petitioner upon which the authority concerned has reached to the conclusion that he was actually indulged in malpractice or irregularity except the reference of the inquiry report. State of Bihar and other {1999(1) BLJ, 458}. That apart, it has not been disclosed in the order anywhere as to what was the basis or evidence against the petitioner upon which the authority concerned has reached to the conclusion that he was actually indulged in malpractice or irregularity except the reference of the inquiry report. Inquiry report in itself may be valid piece of evidence but it is not a conclusive proof and binding any authority as that would have to be scrutinized as to whether the same discloses sufficient evidence against the person. Only after such scrutiny the ultimate punishment of cancellation of licence could have been inflicted. 7. Before parting with the issue, I must indicate that it appears that there was some inquiry report in favour of the petitioner also. In the counter affidavit it has been stated in paragraph no.14 that such inquiry report given by the Executive Magistrate concerned was collusive but this has not been considered anywhere in the impugned order. Though that has been tried to be explained and considered by the revisioanl authority but that would not cure the defect as the licensing authority has not considered this aspect at all. Reference is again been made in this regard to the paragraph no.7 of the judgment rendered in M/s. Umesh Chandra Dinesh Kumar (supra). 8. Thus, in my considered opinion, the impugned orders and proceeding suffer from several incurable defects as discussed above and, cannot be sustained in law. As a result, the impugned orders as contained in Annexures- 8, 6 and 7 are quashed and set aside. So far the issue of suspension is concerned, that order has also outlived its life. The recent clarification of the State Government as contained in the letter Patranak- Pr.-7- Shi. Pa. (Ashwa.)- 12/2012-387 Khad, Patna/ dated 20.1.2012 would be relevant in this regard which explains that if no case is pending under Section 7 of the Essential Commodities Act then the order of suspension should immediately be revoked. Learned counsel appearing for the State has produced a letter issued by the Sub-Divisional Officer, Samastipur addressed to the In-charge, Additional Collector, District Legal Department, Samastipur which clearly discloses that the first information report has not been lodged against the petitioner. That being the situation, the petitioner would be entitled for resumption of supplies also. 9. Accordingly, this writ application stands allowed.